Taylor St. Germain, a Senior Economist at ITR Economics, shares insights on the predicted economic downturn approaching by 2030. He discusses the alarming impacts of rising debt, a retiring Baby Boomer generation, and unsustainable entitlement spending. St. Germain also highlights how advancements in artificial intelligence could reshape economic dynamics, potentially challenging grim forecasts. The conversation reveals the intricate relationship between demographics, federal spending, and investment strategies, urging listeners to prepare for the impending changes.
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insights INSIGHT
Inevitable 2030 Economic Downturn
The U.S. typically experiences a recession every 10 years since WWII.
The key question is the severity of the recession near 2030, potentially a depression due to duration.
insights INSIGHT
Debt, Demographics, and AI Wildcard
Debt and demographics are major drivers of the forecasted 2030 depression.
Baby boomers retiring increases economic burden; AI could be a transformative unknown variable.
insights INSIGHT
Unprecedented Economic Uncertainty
Current economic uncertainty is unprecedented, three times greater than during the pandemic.
Business hesitation slows investment, impacting GDP growth and recession risk.
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ITR Economics has been predicting a “Great Depression” beginning around 2030. Over the past seven years, I’ve had multiple representatives from their firm on the show, and they’ve never wavered from that forecast.
That might not sound so alarming—until you realize that their long-term predictive track record is 94% accurate over the last 70 years.
To understand why their conviction is so strong, tune into this week’s episode of Wealth Formula Podcast. Once you hear the reasoning, it’ll all make sense.
The major drivers of this projected economic downturn are debt and demographics. We’re spending unsustainably on entitlement programs like Medicare and Medicaid—programs that virtually no politician has the appetite to reform.
At the same time, the Baby Boomers—who make up a huge chunk of the U.S. population—are moving out of the workforce and into retirement, where they’ll become a significant economic burden.
It seems inevitable. But as you listen, I want to introduce one wild card that could change everything: artificial intelligence.
I truly believe we’re on the cusp of a technological transformation that could rival the Industrial Revolution. Think back to when Thomas Malthus predicted global famine due to population growth. What he didn’t account for was the invention of the tractor, which revolutionized food production.
In the same way, we may be underestimating the impact of the robotic age driven by artificial intelligence.
Right now, economic growth is tied closely to the size of a country’s working population. But what if AI allows us to dramatically increase productivity with the same—or even a smaller—workforce? What if robotics drives a low-cost manufacturing renaissance in the U.S., making us competitive again without relying on cheap labor from overseas?
In my view, these are the most important questions in American economics over the next decade. And to understand just how critical it is that we get this right, this week’s episode lays it out clearly: the alternative may look a lot like the 1930s.
Learn more about ITR and their resources:
https://hubs.la/Q03kw-Fs0
Wealth Formula by Buck Joffrey